The National Board of Revenue (NBR) is taking steps to digitize how tax audits are selected, replacing the old manual system. This move is meant to remove human interference and build confidence among taxpayers.
For years, taxpayers have complained that the manual selection process has led to unnecessary trouble and harassment. NBR Chairman Md Abdur Rahman Khan recently announced, “We are working on making the selection process digital to ensure it is fair and transparent.”
He also acknowledged that NBR’s reputation has suffered due to the way tax audits are chosen. “Taxpayers feel that the manual process is biased, and this has damaged trust. We aim to remove confusion by fully automating the process,” he added.
As part of this change, the NBR has temporarily paused the selection of new tax files for audits. Md Alamgir Hossain, the NBR’s member of taxes (tax audit, intelligence, and investigation), has instructed field-level tax offices to stop selecting new audits until further notice. This decision was made to resolve the difficulties caused by the current manual system.
Bangladesh has one of the lowest tax-to-GDP ratios in South Asia, at just 7.3%. This is much lower compared to India’s 12%, Nepal’s 17.5%, and Bhutan’s 12.3%. Only 5.2% of the population in Bangladesh are registered taxpayers, a small percentage compared to India’s 23.08%.
Currently, 67% of the government’s revenue comes from indirect taxes. The NBR is working to increase the share of direct taxes, making the system more convenient for taxpayers while encouraging compliance.
The new Income Tax Act 2023 has introduced guidelines that some believe could increase bureaucracy for taxpayers. To address these concerns, the NBR is developing a “Risk Management Engine” software that will bring more transparency to the audit process. The software will collect data from other government agencies and choose tax files based on risk factors, making it easier to detect tax evasion.
Source: UNB News
